Brief Exercise G-9 Click here to view the factor table (For calculation purposes

Question

Brief Exercise G-9 Click here to view the factor table (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) what is the present value of $33,300 due 9 periods from now, discounted at 10%? (Round answer to 2 decimal places, eg, 25.25.) Present value (b) what is the present value of $33,300 to be received at the end of each of 6 periods, discounted at 12%? (Round answer to 2 decimal places, eg, 25.25.) Present value s Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Present value=cash inflow*Present value of discounting factor(rate%,time period)

1.Present value=$33300/1.1^9

=33300*0.42410

=$14122.53(Approx)

2.Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

=33,300[1-(1.12)^-6]/0.12

=$33300*4.11141

=$136909.95(Approx).

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